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National Restaurant Association - Payroll in the age of the Affordable Care Act

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Payroll in the age of the Affordable Care Act

No payroll regulation has had more of an impact on payroll processing than the Affordable Care Act. The health care law, enacted in 2010, is prompting many restaurant operators to seek outside payroll providers.

Restaurant payroll requires knowledgeable providers who understand the complexities of the industry’s human resource challenges. That includes tip reporting and compliance, employees who work in multiple states, and part- and full-time issues. A centralized payroll provider often can manage tax and tip compliance issues more simply. More importantly, payroll providers must stay proficient in federal, state and local tax compliance changes.

Several components of the health care law affect restaurants, primarily the employer shared responsibility and large employer reporting provisions. Other requirements that affect restaurants include: medical loss ratio rebates, Form W-2 reporting of the value of coverage, summary of benefits and coverage, and health insurance marketplaces.

Knowledgeable payroll providers will be able to guide restaurants seamlessly through the process and arm them with flexible reporting options and other essential documents to protect them in case of an audit or employee action.

Here are some key questions every restaurant operator should ask their payroll providers:

  1. What type of systems does the payroll provider use? For example, many providers turn to human capital management systems, which are beneficial for restaurants with hundreds of employees, but not a good option for smaller operations. 
  1. Does the payroll provider offer personal service? Because of the complexities of running a restaurant, operators need to rely on a provider that can offer personal service and human support whenever necessary.
  1. Ask the provider to outline what exactly the restaurant has to do to comply with the ACA and any other new payroll regulations, the deadlines, and what is the cost of the provider’s services. Payroll providers must give their customers all the pertinent information regarding the ACA to ensure proper compliance and reporting.

While the health care law is likely the most complex regulation to in the history of payroll processing, restaurants must contend with other compliance issues, such as tips, taxes and accurate and timely pay for their employees. With these and other changes, operators are recognizing that the days of do-it-yourself payroll are long gone, and outsourcing is the new normal.

Heartland Payment Systems is the National Restaurant Association’s endorsed provider of secure payment processing and payroll and marketing solutions and the developer of Freshtxt, a comprehensitve front-of-the house management systems.

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